Málaga Capital Attracts Attention from Top Real Estate Investors

10 April 2018 – Diario Sur

“We are in love with Málaga”. Just like that, without any qualms, Juan Velayos, CEO of Neinor Homes declared his love for the city. (…). Neinor is one of the large real estate giants to have emerged during this new cycle in the housing market. Fed by international investment funds, the property developer is building tens of thousands of homes all over the country. And Málaga is one of the jewels in its crown. “Our forecast sales for the province amount to €850 million”, announced Velayos today at a real estate meeting organised by the Association of Construction Companies and Property Developers (ACP) in the auditorium of the Museo Picasso.

The most striking aspect is that 40% of those forecast sales correspond to Málaga capital, where Neinor starred in a macro-operation last year when it purchased land from Unicaja, as a result of which it is going to be able to build almost 1,000 homes. Velayos highlighted the great appeal of the city for investors and property developers, in part due to the tourist boom and in part because “things are being done significantly better here than in other places” in terms of the processing of urban development plans. (…). The other experts participating in the forum were in agreement with Velayos: Málaga capital is starting to become an entity in its own right in the real estate market, whereas previously it was always in the shadow of the Costa del Sol brand.

In this way, the Regional Director of CaixaBank in Andalucía, Juan Ignacio Zafra, highlighted that the city “is enjoying a unique time”, adding that the western coast “continues and will continue to operate well” and that the eastern coast “has enormous potential capacity” still to be developed.

The Commercial Director of Tinsa, Pedro Soria, stressed that Málaga is the Mediterranean capital where homes are sold the quickest, after Barcelona. And the Director of Capital markets at Savills Aguirre Newman, Pablo Méndez, revealed that the office market in the city also has significant potential, given that Madrid and Barcelona – until now the only two cities that have operated as proper markets in the tertiary sector – are showing signs of depletion and investors are on the hunt for new opportunities. “Very few cities have an office stock of the size of Málaga: around 600,000 m2. But the stock is old, with a significant shortage of buildings that fulfil current requirements in terms of sustainability, energy efficiency and comfort”, he explained. “Monthly rents average around €12/m2, which is insufficient for investors, but we are now seeing maximum rents of €18/m2/month in the centre. When the average rent reaches €14/m2/month, we will start to see new office building projects, which is what we need”, he added, warning, as an aside, about the need to reserve tertiary land in attractive areas of the city.

The Secretary-General of the ACP, Violeta Aragón, highlighted the good times that the real estate sector is enjoying in the province, although she ruled out any risk of a bubble. (…). “The growth percentages may seem exorbitant, but the reality is that we are starting from levels well below those seen ten years ago”, she explained, providing some examples: last year 3,800 new home permits were granted, compared with 40,000 in 2008; and the average price per square metre amounted to €1,479/m2 last year, compared with the peak of €2,415/m2 in 2008.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake

Madrid: 26% More Office Space Was Leased In Q2 2016

7 July 2016 – Expansión

Despite the decrease in investment in the real estate sector and, specifically, in the office segment so far this year, leasing of office space in Madrid is continuing to rise; and it exceeded the threshold of 100,000 sqm in Q2 2016.

Specifically, leasing of office space in the capital rose by 26% during the second quarter of the year, to 110,000 sqm. In half year terms, that figure represents an increase of 14,000 sqm, to 219,500 sqm, according to a report from BNP Paribas Real Estate. For BNP Paribas Real Estate, this leasing trend reflects the “good health” of business activity in Madrid, which is driving further forecast increases in office space leases.

During the second quarter, approximately 110 operations were signed, which means that more than 100 operations have been signed per quarter for the last seven consecutive quarters, compared with the average of 88 contracts per quarter registered between 2009 and 2014.

In terms of average rents, the real estate consultancy firm notes an increase in four sub-areas of Madrid (the financial district, the centre, the decentralised area and the outskirts). Specifically, overall average rents have increased by around 13% in annual terms, to €15/sqm/month.

BNP Paribas Real Estate highlights the behaviour of the decentralised area of Madrid, which accounted for 42% of the new leases during the quarter and recorded the highest increase in rents, with rises of almost 30% YoY. “The trend seen during the crisis, when most lease contracts were signed in areas inside the M-30, is now being reversed”.

The consultancy firm highlights in its report that the amount of available surface area is still decreasing, in light of the shortage of new offices and the flurry of new leasing activity over the last two years. Specifically, at the end of June, the availability rate stood at less than 15%, with further decreases forecast.

In terms of predictions for the rest of the year, BNP Paribas Real Estate expects the leasing figures in the second half of the year to be in line with those seen during H1, and it forecasts that rental prices will increase “slightly”.

“These figures are backed up by a labour market that is continuing to recover, with the most recent employment figures showing positive results. The number of people registered as unemployed is at its lowest level since September 2009 and that figure is expected to fall further still”, say sources at the consultancy.

Original story: Expansión

Translation: Carmel Drake